Russian Pipeline Gas Flows to Europe Hit Year High | Energy Intelligence

Gazprom’s pipeline gas exports to Europe hit a one-year high in terms of daily flows last week as the EU struggles to phase out Russian gas imports.

Russia’s state-run gas giant and sole pipeline gas exporter supplied 99.0 million cubic meters on Oct. 23 to Europe, excluding Turkey but including other non-EU destinations on the continent. It was the highest daily level since Oct. 18, 2023, when it supplied 99.3 MMcm, according to gas transmission data.

Gazprom hasn’t supplied that much since the summer of 2022, when the 55 billion cubic meter per year Nord Stream gas pipeline to Germany was still in operation, although already well below capacity.

With the halt of flows via Nord Stream and 33 Bcm/yr Yamal-Europe pipeline to Germany, Russia’s pipeline gas exports to Europe have dropped by nearly 80% since the beginning of the war in Ukraine in February 2022.

Reverse Trend

But the downward trend has reversed this year, with flows into the EU having already topped full-year levels of 2023, Energy Intelligence estimates. Gas flows have been particularly higher into EU member states Greece and Hungary, which have already imported 20% and 8% more from Russia as of last week than in full-year 2023, according to Energy Intelligence estimates.

Gazprom’s overall flows to Europe, including to non-EU Moldova, Serbia, Bosnia and Herzegovina and North Macedonia, haven’t yet topped full-year 2023 levels but will most likely exceed them next month. As of Oct. 26, Gazprom has supplied some 26.1 Bcm to the region, compared with some 28.3 Bcm in full-year 2023.

Exports are strong this year because Gazprom’s hub-linked long-term contract prices have proved to be competitive in the current price environment, posing greater competition to spot LNG imports and prompting the remaining buyers to increase their offtakes from the bottom levels of the first half of 2023.

At the beginning of last year, Gazprom’s prices were significantly higher than spot prices, cooling down after a hike in late 2022, which caused a sharp drop in offtakes under Gazprom’s contracts. But as the gap narrowed in mid-2023, Gazprom’s exports have been relatively strong since July 2023.

Ukrainian Surge

Gazprom’s gas flows via Ukraine, supplying mostly Slovakia, Austria and Moldova, have been relatively high this month, averaging 43.2 million cubic meters per day in Oct. 1-26, the highest level since May 2022, Energy Intelligence estimates.

In mid-May 2022, Ukraine stopped the transit via one of the two entry points on the Russian border, citing Russian military interference in operations of the gas metering station. Since then, Russian gas transit flows have been quite stable at around 42 MMcm/d, except for a short downward spell at the beginning of 2023.

Gazprom’s flows via the only other remaining route to Europe, the Turk Stream pipeline, averaged 47.9 MMcm/d in Oct. 1-26, well above the pipeline’s nameplate Europe-bound capacity of some 43.2 MMcm/d.

Turk Stream average daily flows reaching Greece, Hungary, Serbia, Bosnia Herzegovina and North Macedonia, like Gazprom’s overall average daily flows to Europe, including the Ukrainian transit, have been slightly lower so far this month than in July this year, which was the highest level since August 2023.

Arctic LNG 2 Halt

Russia’s LNG exports have also been strong this year, as Western sanctions do not target current supplies from Russian large-scale plants, except for the new Arctic LNG 2 project, which earlier this month had to stop production because of US sanctions, a source close to the project tells Energy Intelligence.

Arctic LNG 2 launched its first liquefaction train in December 2023 and was supposed to add 6.6 million metric tons of new exports this year. But it only started shipments in early August, delayed by the US sanctions and a lack of an adequate tanker fleet.

In mid-October, LNG production stopped as storage tanks were full, while Arctic LNG 2 is struggling to sell its blacklisted cargoes, the source said, adding that Train 1 is not planned to restart during the winter.

It is not clear whether Arctic LNG 2 will start its second train, scheduled for the end of this year, given the Train 1 shutdown and storage tank capacity constraints.

Since early August, the plant has loaded eight cargoes, none of which has reached a final buyer yet.